WORLD / Wall Street Journal Exclusive
Vodafone to unveil self-branded mobile phone
By CASSELL BRYAN-LOW (WSJ)
Updated: 2006-09-27 17:06
http://online.wsj.com/public/article/SB115930210354774666-SInOlGbgyOZD9GDGT
qhMtYBIikA_20061004.html?mod=regionallinks
Vodafone Group PLC plans to introduce its first Vodafone-branded consumer
cellphone, highlighting the growing interest among some cellular
operators to reduce their dependence on big-name handset makers.
Vodafone, the world's largest cellphone-service provider by sales, plans
to announce as early as tomorrow a phone aimed at consumers that will
carry only the Vodafone brand. Like other large service-providers in
Western Europe and the U.S., Vodafone typically offers phones bearing the
manufacturer's logo as well as its own.
The new handset, made by Chinese equipment maker Huawei Technologies Co.,
also underscores the rise of a new class of Asian manufacturers and their
spread beyond Asia. Known as white-label manufacturers, the companies
make equipment to be branded by others as well as under their own brands.
While carriers in Japan long have branded their own phones, it is only in
the past few years that some of their Western European and U.S.
counterparts have shown interest.
Part of the appeal for Vodafone is price. Jens Schulte-Bockum, group
director of terminals at Vodafone, says the new handset costs about 30%
less than the roughly $285 to $380 the company would expect to pay for a
similar phone from a large equipment maker. Vodafone also can get a
customized handset that will give customers easier access to services
such as music and games that Vodafone sells through its own Internet
portal. The new handset, for instance, has a button that takes customers
straight to Vodafone's music services.
Such customized handsets account for a very small portion of the handset
business in Western Europe and the U.S., where customers typically look
for the manufacturer's brand when shopping for handsets. But carriers may
use the handsets as a bargaining chip with their traditional suppliers.
They will likely "use these devices to extract better pricing from the
larger handset makers," says Hugues de la Vergne, an analyst in Dallas at
research firm Gartner Inc.
Vodafone has experimented with a company-branded product targeted at
business users, made by Taiwan's High Tech Computer Corp.
Mr.Schulte-Bockum added Vodafone plans to launch two or more similar
phones next year. About 3% to 5% of the handsets offered by the company
would then carry only the carrier's brand.
Cellphone-service providers want consumers to become attached to their
brands, and therefore less likely to switch to another service provider.
As part of that effort, many large providers have invested in building
branded Internet portals where consumers can download music, games and
television clips. Such services have struggled, Nomura analyst Richard
Windsor said in a recent research report. "Operator-branded experiences
have largely failed to capture the imagination of users," he said.
Carrier initiatives to push their own handsets also will struggle unless
they are willing to go further in terms of what services they offer, Mr.
Windsor added in an interview. For instance, providers need to offer a
wider Internet experience rather than effectively restricting access to
their own portals as most still do. Because large service providers work
closely with the handset makers to design how handsets for their network
operate, they influence both the software and hardware that controls how
customers use their phones.
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